Why Hasbro Is Getting Smashed Right Now By Brands Like Angry Birds

Illustration by Kim Bhasin / Business Insider
Hasbro is the #1 seller of board games on the planet, and boasts big name time-honored brands like Monopoly, Scrabble and Battleship. It's usually one of the big winners as shoppers stock up presents for the holidays.

It looks like it's losing to rival Mattel in this year's holiday frenzy as well, reports the AP.

What's contributing to Hasbro's woes? A few things:

It's relying on old brands, instead of creating new, fresh ones -- Hasbro has made a habit of taking one of its successful games and repackaging it in a bunch of different ways to leverage the particular brand. That's an efficient, easy method, but it's not a substitute for innovation. It's not creating any new, big hits. Meanwhile, Mattel's using a method that could be effective for Hasbro if done right: licensing other companies' trendy brands that already exist. One of its hits this season is a board game based on Rovio's Angry Birds, a brand that's very much relevant these days.

It hasn't been able to handle the influx of casual online games -- Angry Birds is a prime example of a digital game that's outperforming Hasbro's traditional offerings. Hasbro just hasn't adapted. Though it does license digital games through Electronic Arts, a mere 5% of its profits over the past two years were from licensing. Board games are on the decline with sales falling 3% over the last three quarters, according to the WSJ.

And it's getting away from its core business -- Hasbro is a toy company, yet lately, it has been focusing a lot of time and money on becoming an entertainment company by getting into TV and on to the big screen. But again, it has been using existing brands to do so. Its movie based on Battleship is set to hit theaters in 2012, and it now has a children's TV network, The Hub, which features brands like My Little Pony.